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The Postal Service presented a proposal to Congress on Tuesday that might stave off financial collapse but would have far-reaching ramifications for federal workers.

Postal officials say they will be unable to make this month’s $5.5 billion payment to cover future employee health care costs because the agency will have reached its borrowing limit and doesn’t have enough cash. The Postal Service has proposed ending Saturday mail delivery and is considering cutting as many as 120,000 jobs as it faces a second straight year of losses of $8 billion or more. A decline in mail because of the Internet and the loss of revenue from advertising amid the economic downturn have taken a toll on the agency.

According to the Washington Post, the White House is planning to present a financial rescue plan for the U.S. Postal Service in the coming weeks as part of a broader, $1.5 trillion deficit reduction package, it said Tuesday.

In advance of those recommendations, the Obama administration is asking Congress to give the Postal Service a 90-day extension to pay mandatory annual retirement payments totaling about $5.5 billion.

The delay should allow lawmakers, the Postal Service and the White House enough time “to carefully work through the details of a proposal,” Office of Personnel Management Director John Berry told senators Tuesday.

“This is a complex proposal that requires further analysis to determine if the Postal Service can achieve significant cost savings through administering its own health benefits program and retirement system,” he said in a transcript of his testimony.

Meanwhile, other ideas were flowing on Twitter:

@EricAKelso suggested: “Why don’t they sell the #Postal Service to a private company?”